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Our Bureau

Could be operational for crops in rain-fed areas

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Mumbai March 1 The Centre will soon offer weather-based crop insurance for farmers.

Budget 2007-08 has announced a weather-based crop insurance scheme on a pilot basis in a few States.

The scheme will be operated on an actuarial basis with an element of subsidy.

The Budget has allocated Rs 100 crore for the pilot in 2007-08.

"This is the first time that the Government has endorsed a weather insurance product," said an agriculture insurance expert.

"The pilot project will most likely be implemented at the block level and will be conducted only in those areas where historical weather data for the last 25 years is available."

The expert added that the scheme could be operational in rain-fed farm areas like Jharkhand, Maharashtra, Karnataka and Uttar Pradesh.

The Government also plans to continue the National Agricultural Insurance Scheme (NAIS) in its current form for Kharif and Rabi 2007-08.

The scheme is currently yield-based and the rates are administered and not based on actuarial estimates.

The Budget has made a provision of Rs 500 crore for the scheme.

At the end of 2005-06, NAIS had covered 7.9 crore farmers for a premium of Rs 2,332.50 crore and finalised claims of Rs 7,255.75 crore.

The Budget has also announced a death and disability insurance cover through LIC to rural landless households under a new scheme called Aam Admi Bima Yojana (AABY).

The head of the family or one earning member in the family will be insured through the scheme.

The Centre will bear 50 per cent of the premium of Rs 200 per year per person, while the State Governments may have to bear the other 50 per cent on behalf of the beneficiaries. A fund of Rs 1,000 crore will be maintained by LIC.

Mr D.K. Mehrotra, Managing Director of LIC, said that the corporation is running similar schemes for below poverty line families in Rajasthan and Uttaranchal.

LIC has covered a total of two crore lives under its social security schemes. In the current fiscal, the corporation received premium of around Rs 38.78 crore for these group schemes.

More Stories on : General Insurance | Budget | Climate & Weather

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